China is an emerging market right? But is it?
While it’s the biggest component of the Emerging Markets Index $EEM, is it something larger, maybe more developed?
It doesn’t really have a category.
It’s like Notre Dame Football. [Read more…]
Credit Spreads Favor the Bears
From the desk of Ian Culley @IanCulley
No one likes a bear market, except for the bears of course.
They haze the uninitiated, test market veterans, and remind everyone that assets can go to zero.
Not fun for most!
When we take a step back and assess all the data in front of us today, the outlook remains dismal for the overall market.
The New York Stock Exchange and the Nasdaq have posted more new lows than new highs for 31 weeks and counting. Leadership groups carry a defensive tone. Topping patterns continue to resolve lower. Support levels are being ignored and violated. Long story short, it’s ugly out here.
And it’s not only stocks… Bitcoin just booked its worst month and quarter in over a decade and bonds are having one of their worst years in history.
No wonder investor sentiment is in the dumps. It’s clear we are in the midst of a bear market.
They’ve replaced the comical “stocks only go up” memes with images of the grim reaper coming for our favorite names. Even memes aren’t as funny in a bear market!
Given the current environment, we continue to rely on two key areas of the market for insight: junk bonds and credit spreads. They both offer excellent information, particularly when markets are in turmoil.
Let’s revisit these areas today.
Spoiler alert: We probably have a rough road ahead! [Read more…]
[Video] Putting High Energy Premiums To Work For Us | Options Trading w/ Sean & JC
For this week’s trade, we’re selling an $XLE August 65/85 Short Strangle for an approximately $2.75 credit. This means we’ll be naked short equal amounts of the 65 puts and 85 calls.
Get the full details, risk management procedures and targets for this trade here:
The Short Report (06-29-2022)
From the desk of Steve Strazza @Sstrazza
When investing in the stock market, we always want to approach it as a market of stocks.
Regardless of the environment, there are always stocks showing leadership and trending higher.
We may have to look harder to identify them depending on current market conditions… but there are always stocks that are going up.
The same can be said for weak stocks. Regardless of the environment, there are always stocks that are going down, too.
We already have multiple scans focusing on stocks making all-time highs, such as the Hall of Famers, the Minor Leaguers, and the 2 to 100 Club. We filter these universes for stocks that are exhibiting the best momentum and relative strength characteristics.
Clearly, we spend a lot of time identifying and writing about leading stocks every week, via multiple reports. Now, we’re also highlighting lagging stocks on a recurring basis.
If This, Then It’s 2008 All Over Again
[Options] Premium Energy Prices
Internally, we were talking yesterday about the energy space and the recent pullback in prices. While still the strongest sector in the market in 2022, this move off the highs has been notable.
Is the trend over? Or was that just the “hot money” taking profits?
I’m not sure we have a definitive answer to that question yet. It looks to me that the market is still sorting that out. And this condition of indecision, coupled with high implied volatility priced into options is combining into a nice opportunity to collect some options premium while energy figures itself out.
So we’re going to wade into the energy pool with a delta-neutral short-premium options trade.
[Read more…]
Is the Singapore Dollar Just Another Brick in the Wall?
From the desk of Ian Culley @IanCulley
In almost every market environment, there are assets we want to buy and assets we want to sell. That holds even when we think the only option is to sell.
Recently, the strong buys have been in commodities and cyclical areas of the market, while bonds and the major stock indexes have sold off. That’s dramatically changed in recent weeks, though.
Now, all the major asset classes – bonds, stocks, and commodities – are under pressure, as bears come for the leadership groups. It seems nothing is immune to bearish price action these days.
Despite the broad selling pressure, there’s still an asset we want to buy: the US dollar. That’s right, the good old greenback! It’s one thing the bears can’t seem to crack.
If we think about it from an intermarket perspective, a defensive bid for dollars makes sense given the downside pressure on risk assets across the board. We don’t think it’s a coincidence.
Regardless, the USD is strong and shows no signs of changing anytime soon.
Last week, we outlined bases in the USD/NOK and the USD/SEK crosses. This week, we’ll highlight the Singapore dollar.
[Premium] Details For July 2022 Monthly Strategy Session
These are the registration details for our Live Monthly Candlestick Strategy Session for Premium Members of All Star Charts.
This month’s Video Conference Call will be held on Tuesday July 5th @ 6PM ET. As always, if you cannot make the call live, the video and slides will be archived and published here along with every other live call since 2015.
Here are the details for Tuesday evening: [Read more…]
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